A vape company with ties to Scottsdale was hit with a hefty fine and advertising restrictions by a Los Angeles County Superior Court judge for allegedly marketing its products to minors.
Judge Teresa A. Beaudet approved a $1.2 million penalty against Kandypens for violating multiple California statutes, including the STAKE Act, a law designed to reduce use of tobacco products by people under 21.
The judge’s ruling also puts several restrictions in place to prevent the company from marketing its products to minors in the future.
According to L.A. City Attorney Mike Feuer, who filed the civil suit in 2018, Kandypens is a California-based company that sells vaping products online.
It appears the company also maintains a substantial presence in Scottsdale as well.
According to the only address listed on the Kandypens website, the business is located in a small, non-descript industrial and office building in the Scottsdale Airpark.
Online customer service jobs for the company are also linked to the Scottsdale location and the warehouse is listed as the return address for defective products in a customer FAQ.
Kandypens was also one of 10 vendors listed for the special event application for a cannabis industry open air market held at a downtown Scottsdale smoke shop on April 17.
Kandypens was one of three vape distributors taken to court by the Los Angeles City Attorney in 2018 over allegations of marketing to minors.
Similar suits have been filed by other city, county and state’s attorneys across the country over the past several years as vape and e-cigarette use among young people continues to rise.
According to the National Institute of Health, an annual survey of drug, alcohol, and cigarette use in 8th, 10th, and 12th graders showed that 37 percent of 12th graders reported vaping in 2018 compared with 28 percent in 2017.
Health officials have alleged that the rise in use was connected to youth-targeted marketing and the use of flavored products.
According to the Centers for Disease Control, 82.9 percent of youth who use e-cigarettes preferred flavored varieties.
Feuer alleged Kandypens marketing plan specifically targeted underage users by paying for the product to be placed in music videos from artists popular with teenagers.
“We allege that they paid for product placement in music videos that featured with large teen followings like Justin Bieber and the 2019 Nickelodeon Kids Choice Awards host DJ Khaled,” Feuer said at an April 19 press conference announcing the penalties.
The lawsuit also alleged that Kandypens did not effectively employ “age gating” on its website and social media to prevent users under 21 from accessing content. Unlike Arizona, the minimum age to purchase tobacco in California is 21.
“Age gating” refers to verification systems used to block underage users from accessing digital content on restricted items.
An investigator with the L.A. City Attorney’s Office posed as a teenager online and was able to purchase items through the Kandypens website, according to Feuer.
“Our investigator used a fake email account and a prepaid gift card and at no time did the company ask for a date of birth or otherwise verify the age of our investigator,” he said.
An attorney representing Kandypens did not respond to a request for comment.
In a response to the original lawsuit in 2018, Kandypens’ attorney argued the company did not violate the law and alleged prosecutors misrepresented the facts.
Kandypens’ attorney also argued the alleged violations constituted protected speech under the First Amendment and any illegal activity occurred after the product was no longer in the company’s possession.
Kandypens also argued the $1.2 million penalty was excessive considering the L.A. City Attorney’s Office agreed to $350,000 settlements in 2019 with NEwhere, Inc. and VapeCo Distribution – two other vape distributors sued by the city for allegedly marketing to minors.
But the judge determined the seven-figure penalty was appropriate, stating: “Defendant’s misconduct involved more violations over a greater period…More problematically, those other nonparties voluntarily accepted the lower penalty as part of a settlement instead of actively litigating the claims like defendant has done here.”
Beaudet also granted prosecutors’ requests to limit Kandypens’ marketing tactics despite protests from the company.
According to Feuer, the company must age-gate its social media accounts and can only place products in adults-only entertainment venues. It also cannot have paid marketing contracts with anyone under 21 years old or celebrities featured on Nickelodeon awards shows.